American Elephants

Conflict of Interest or Crony Capitalism? Take Your Pick. by The Elephant's Child

Assistant Secretary of Energy Cathy Zoi, as revealed by disclosure documents, has a huge financial stake in companies likely to profit from the Obama Administration’s “green policies.”

Zoi was previously CEO of the Alliance for Climate Protection — founded by Al Gore — and left that position to serve as assistant secretary in charge of energy efficiency and renewable energy.  She manages billions in “green jobs ” funding.  Disclosure documents show that she is  in a position to affect the fortunes of her previous employer — former Vice President Al Gore — but she has large holdings in two firms that could profit directly from policies proposed by the Department of Energy.

Zoi and her husband hold 120,000 shares in Serious Materials,where he is  in charge of public policy operations, as well as stock options.  Zoi also holds between $250,000 and $500,000 in “founders shares” in Landis+Gyr, a Swiss “smart meter” firm.  She also still owns between $15,000 and $50,000 in ordinary shares.

Smart meters are electric meters that return information about customer power usage to the power company immediately and allow the power company to control the amount of power that a customer can consume.  Note that control is the key word.

Obviously, DoE funding to encourage the adoption of smart meters would lead to increased sales by Landis+Gyr and a windfall for Zoi.  And insistence on insulated windows will lead to increased sales by Serious Materials.  After all Serious Materials has received visits and endorsement by both the President and the Vice President — something their better-known competitors have not received.

This is what I have always understood to be called a conflict of interest.  John Stossel did a show on what he calls crony capitalism — featuring —  Serious Materials.  This is problematical.

As a condition of employment with the Obama Administration, while Ms. Zoi maintained her holdings, she promised that “she would not participate personally and substantially in any particular matter that has a direct and predictable effect on their financial interest” without obtaining a waiver first.  Uh huh.

People in government usually divest themselves of problematic investments. Given the often verbalized interests of the Obama administration’s Department of Energy it would seem impossible for her to avoid a serious conflict of interest.

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